I think it’s part of the aesthetic of the game that troops are supposed to move slowly from their capitals, so that it takes a long time for reinforcements to reach the front lines. It’s meant to evoke the theme of trench warfare. The only exception is the extra British factory in India, which is supposed to thematically represent all of the ships, etc. bringing soldiers from India, Australia, New Zealand, Singapore, Hong Kong, and so on.
With no bid, the Central Powers have a very hard time of it, because the Indian factory turns out to be too powerful – the British can cripple the Ottomans in about the time it takes for the Central Powers to reach Paris or Rome or Moscow, and then the Americans can reinforce and stabilize Paris or Rome before the Central Powers can take their second capital. Eventually the British press on past Istanbul, or else shift gears and build a fleet in the English Channel to start shuttling over their starting troops, and then it’s all over for the Central Powers.
The Munich factory seriously speeds up the attack on Paris or Rome, and also makes that attack more effective, since there are fewer French troops on the board to defend against the attack, so the Germans take fewer casualties and reach Paris faster. It makes a big change in the game.
Could you put factories in Budapest and Canada, too? Sure. The Budapest factory will make Austria that much closer to Russia, and could also give Austria a chance to reinforce Istanbul if Britain is going hard against the Turks. The Canada factory will probably not see much use, other than maybe building a transport to help ferry over the starting Canadian troops, and building the occasional sub to scare away the German navy. The Canada factory could make it that much harder for Germans to gain naval superiority in the Atlantic.
Just be aware of what options you’re giving to which players, and how that will change the game for everyone else. If you just plop down factories wherever they seem realistic, you may not like the results!